The West is Touting a New Trade Route That Bypasses China

(Photo Credit: Johannes Plenio/Unsplash)
(Photo Credit: Johannes Plenio/Unsplash)

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Think of them as suspenders, not belts.

At the G20 summit in New Delhi this past weekend, global leaders voiced their support for a new ship, rail, and digital corridor that will connect India to the Middle East and Europe — and counter China’s Belt and Road Initiative.

Trains, Boats, and Undersea Cables

The proposed corridor, with backing from leaders including the US, India and Saudi Arabia, could be a momentous shift for the exchange of goods. “This is nothing less than historic,” European Commission President Ursula von der Leyen said.

Chinese President Xi Jinping didn’t attend the summit, but something tells us he’s less than pleased. His country’s trillion-dollar-plus initiative to fund infrastructure projects in mostly developing countries was a bid to expand China’s economic reach. But it has courted controversy from some who see it as a predatory money pit: In 2018, for example, Sri Lanka couldn’t afford the payments on its strategic Hambantota port, so it was handed over to China.

Western leaders looking to mitigate China’s influence while also cooling tensions with the Middle East could view a new trade pact as a win-win:

  • India is like the cool new kid in class — it has the largest population on Earth, and companies like Apple, Boeing, and Samsung are eyeing it as the next big manufacturing hub. In June, Biden invited Prime Minister Narendra Modi to the White House in a bid to stoke more sales of American-made weapons.
  • EU officials told the Financial Times that the bloc wants to deepen trade and investment ties with Gulf nations, particularly in response to Russia’s war with Ukraine. The EU has already set aside 300 billion euros between 2021 and 2027 for its Global Gateway initiative to rival China. The US also is bolstering investments in the region — it’s in talks with Saudi Arabia to secure metals like cobalt from Africa, The Wall Street Journal reported.

Reality Check: While the excitement is high, some caution on behalf of the US and EU is warranted. It’s been more than a decade since a group of Gulf nations agreed on an international rail network, but only a portion of it has been built. Plus, there’s the not-small matter of conflicts within the Middle East itself. Despite Israel and Jordan signing a peace treaty in the 1990s, the two nations aren’t exactly the best of friends. In April, Israeli authorities arrested a Jordanian member of parliament for trying to smuggle weapons and gold into the West Bank. The arrest occurred not long after an intense skirmish between Israeli police and Palestinian Muslims at the al-Aqsa Mosque in Jerusalem.